Representatives from Gazprom gave a presentation to Japan yesterday from Russky Island, providing an update on the Vladivostok LNG project – highlighting how “attractive” it is for Japanese consumers and investors.

In attendance were Vitaly Markelov, Deputy Chairman of the Gazprom Management Committee, Sergey Sidorov, First Vice Governor of the Primorye Territory, along with heads of Gazprom’s structural units and subsidiaries.

It was highlighted during the presentation that the Asia-Pacific LNG market was the most receptive and fast growing in the world, with Japan being one of the major consumers there.

The Vladivostok LNG project, operated by Gazprom, is quite well-timed to capitalise on this predicted consumer boom. The start of supplies from the first train of the plant is expected in 2018, from the second train – in 2020, with the capacity of each train amounting to five million tonnes a year. In future the LNG plant may be further expanded.

According to Gazporm one of the key advantages of the Vladivostok LNG project fundamentally distinguishing it from other projects is its significant and secure resource base. At present, Gazprom’s A+B+C1+C2 gas reserves in the operating Sakhalin and the Yakutia and Irkutsk gas production centers under development exceed 4.6 trillion cubic meters.

The company continues large-scale geological exploration in these regions, which are forecasted to result in further gas reserves buildup.

An important condition for successful project implementation is the availability of the necessary infrastructure. Gas will be delivered to the plant via the Sakhalin – Khabarovsk – Vladivostok gas transmission system already constructed by Gazprom and eventually via the projected Power of Siberia gas pipeline.

The competitive advantages of the Vladivostok LNG project were also highlighted - including a high quality of gas, application of a reliable and proven gas liquefaction technology, favourable natural and climatic conditions, maximum proximity to Asia-Pacific markets and the company’s long-term experience in supplying gas to the global market.

“Today it may be stated with certainty that Vladivostok LNG is very attractive both for prospective consumers and investors. The consumers will get a new regular supply of high-quality energy sources in the immediate proximity to their receiving terminals. As for the investors, they have an unrivalled opportunity of investing into the project with an access to the very promising emerging Asia-Pacific markets,” said Vitaly Markelov.

He confirmed the possibility of attracting a strategic partner which may acquire up to 49% in the project.

It was particularly stressed at the meeting that Gazprom guaranteed full compliance with environmental and security standards at all stages – during the plant construction and operation. 

Background

Gazprom aims to speed up new LNG projects intended to increase the company’s share in the global gas market. Vladivostok LNG is one of such projects.

In February 2013 the project entered the investment stage. In March the Action Plan regarding the LNG plant near Vladivostok was approved as well as the Action Plan regarding the resource base of the project. In September a special-purpose company Gazprom LNG Vladivostok was registered in the Khasansky District of the Primorye Territory.